CAPE TOWN: South African stocks gained the most in four months for the first weekly gain this year as global equities rallied with oil amid optimism that policy makers in Europe and Asia will step in with more stimulus measures.
“The way we’ve gotten hammered and with the sentiment being so negative, certain shares were completely overdone,” Ferdi Heyneke, a portfolio manager at Afrifocus Securities, said by phone from Johannesburg. “It looks like there’s potential for more stimulus to be thrown at markets at this stage, especially in China, to stimulate those economies and prop things up.”
European Central Bank President Mario Draghi said Thursday the ECB could step up stimulus as soon as March as concern grows over the strength of the euro-area recovery. China’s vice president Li Yuanchao said the government is willing to intervene should market turmoil continue. The two regions together account for more than half of South Africa’s exports.
The FTSE/JSE Africa All Share Index rose 3 percent, the most since Sept. 16, rebounding from an 11-month low and paring the decline this year to 6 percent. Platinum mining company, Lonmin Plc led gains, climbing by the most since Nov. 26, while iron ore producer, Assore achieved the biggest rise since March 19. Africa’s biggest company by market value, Naspers Ltd., and diversified miner BHP Billiton Plc. were the biggest contributors to the index’s move. The gauge is up 1.5 percent this week.
